offsetting receivable and lease liability

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Mathew Matt
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offsetting receivable and lease liability

Post by Mathew Matt »

Hey,

Does anywea in IFRS 16 allowed to offset lease liability and receivable (lessee).I have a client who has a receivable with alessor and he would like to offset it with the lease liability?

You could also direct/share with me a good reading material to that effect
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JRSB
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Re: offsetting receivable and lease liability

Post by JRSB »

Will it be settled net, ie will they not pay rent until the receivable it utilised against it?
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Marek Muc
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Re: offsetting receivable and lease liability

Post by Marek Muc »

IFRS 16 doesn't have any specific requirements with regards to offsetting, so general requirements apply:
https://ifrscommunity.com/knowledge-bas ... struments/
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nauman
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Re: offsetting receivable and lease liability

Post by nauman »

What @JRSB said, it depends on whether there is a legal enforceable right to settle. Usually any receivables / prepayments on date of adoption of IFRS 16 form part of right-of-use asset as opposed to being netted off against lease liability.
Mathew Matt
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Re: offsetting receivable and lease liability

Post by Mathew Matt »

JRSB wrote: 21 Oct 2020, 10:17 Will it be settled net, ie will they not pay rent until the receivable it utilised against it?
yes sure, that sis the agreement
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Marek Muc
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Re: offsetting receivable and lease liability

Post by Marek Muc »

and how did the receivable from lessor arise? is it a prepayment for future periods for the same lease?
Mathew Matt
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Re: offsetting receivable and lease liability

Post by Mathew Matt »

no its for a different transction. its didnt arise out of a lease
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Marek Muc
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Re: offsetting receivable and lease liability

Post by Marek Muc »

ok then general offsetting criteria apply (see the link in my previous post)
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